media call presentation - home rabobank group...media call presentation interim results 2016 ... 18...
TRANSCRIPT
Mediacallpresentation
Interimresults2016
WiebeDraijerandBasBrouwers18August2016
StrategicFramework2016-2020enablesRabobanktostrengthenitscooperativemission
2.Flexibilityandbalancesheetreduction
3.Improvingperformance
2
Westrivetobenearbyatkeymomentsbyputtingproximityandtruecustomerfocusatthe
heartofourservice
Wemakeourbalancesheetmoreflexibleandreduceitsusewhilemaintainingandincreasing
ourclientoutreach
Weimproveperformancesignificantlyinthecoreofthebank,bothintermsofrevenuesand
incosts
1.Excellent
customerfocus
Performanceimprovementlevers
Enablers
Bettercooperativeorganisation
Empoweredemployees
Culturalchange
Makingprogressonimprovingclientsatisfactionandinteraction
3
19 1724
3337
Jun-14 Dec-14 Jun-15 Dec-15 Jun-16
NPSretailcustomers
2429 32
3743
Jun-14 Dec-14 Jun-15 Dec-15 Jun-16
NPSprivatebankingcustomers
1.Excellentcustomerfocus
Numerousnewflexiblecontactpoints
Highestrankedinvestmentapp
Excellenceincustomerservice The‘NewNearby’ Linkingpinroleforcustomers’needs
Mortgageinoneweek
PartnershipwithKeplerCheuvreuxforECM-transactions
11 1018
21
34
Jun-14 Dec-14 Jun-15 Dec-15 Jun-16
NPSbusinesscustomers
31-03-2016RabobankreducesbalancesheetbysellingpartofmortgageportfolioRabobankhassoldashareofitsmortgageportfolioworth€1billiontotheinsurancecompanyVIVATVerzekeringen.
14-07-2016FGHBanksellsrealestateloansFGHBank,asubsidiaryofRabobank,soldaportionofaportfolioofqualityrealestatetoalargeDutchinstitutionalinvestor.Thetransactionwillcreatefinancingcapacityfornewrealestateloans.
18-07-2016Obvionreducesbalancesheetbysecuritising€1billionofitsmortgageportfoliooff-balance
4
18-07-2016ObvionsellsaportfolioofDutchmortgagesworth€340milliontoBinckBank
01-07-2016DLLSharpensFocusonGlobalVendorFinanceBusinessSaleofAthlontoDaimlerFinancialServicesannounced
2.Flexibilityandbalancesheetreduction
Progressinreducingandmakingbalancesheetmoreflexible
27-07-2016RabobanksellspartmortgageportfoliotoDeltaLloydRabobankhassoldashareofitsmortgageportfoliofor€500milliontoDeltaLloyd.
04-08-2016Norfund,FMOandRabobankjoinforcesInvestinfinancialinstitutionstosupportgrowthinAfrica
Costreductionprogrammeaccelerateswithlowerheadcountasamajorcontributor
54,000
52,000
47,000
40,000
2,000
1,900
3,100
7,000
2014 Reduction 2015 Realised Currentinitiatives
YE2016forecast
Planned YE2018forecast
Numberofstaff(inFTEs,incl.externalhires)
• Targetedreductionofstaff:12,000FTEsby2018• RealisedH12016:~1,900FTEs(excluding~500FTEsof
redundanciesstillintheresignationprocess)• Currentinitiativeshavebeenacceleratedtoachieve
5,000FTEsreductionin2016(versusinitialtargetof4,000FTEs)
• Moreefficientprocessesandautomation,combinedwithsimplifiedstructuresanddelayering
2016:ayearofacceleration
-12,000
5
3.Improvingperformance
Solidnetprofitdrivenbyrobustrecurringincomeandlowloanimpairmentchargesaseconomicrecoverycontinues
6
-
2,017
852
1,133
H12015 H22015 H12016
Operatingprofitbeforetax(in€mn)
in€mn H12015 H22015 H12016
Netinterestincome 4,482 4,657 4,375
Netfeeandcommissionincome 962 930 982
Otherincome 1,483 500 446
Totalincome 6,927 6,087 5,803
Operatingexpenses -3,833 -4,312 -4,276
Regulatorylevies -121 -223 -246
Impairmentlossesongoodwill -600 -23 0
Loanimpairmentcharges -356 -677 -148
Operatingprofitbeforetax 2,017 852 1,133
Tax -495 -160 -209
Netprofit 1,522 692 924
Profit&Lossaccount
Marketvolatilityimpactsotherincome,whileoperatingexpensesincludesomeelevatedcharges
7
-
* InterestRateDerivativesRecoveryFramework(IRDF)€21mnchargedtotheP&Lin2014.** Resultsonthefairvalueofissueddebtinstruments(structurednotes)andhedgeaccounting
2.017
852
1,133
160
563
990
H12015 H22015 H12016
Underlyingprofitbeforetax(in€mn)
In€mn H12015 H22015 H12016
GoodwillimpairmentRNA -600 -3
Restructuring -26 -219 -190
DerivativesFramework* -150 -514
FairValueitems** 466 -190 -286
Totaleffect -160 -563 -990
2,177
1,415
2,123
Exceptionalitemsincludedinoperatingprofitbeforetax
Coreincomeitemsremainstable
8
4.482 4.657 4.375
962 930982
1.017 690732
466
-190 -286
H12015 H22015 H12016
Totalincome(in€mn)
6,927
6,0875,803
Otherincomeexcl.FVitems
Netfeeand
commissionincome
Netinterestincome
Interestincomedown,feeandcommissionup
• Netinterestincome:-2%vs.1H2015;netinterestmarginstable
• Netfeeandcommissionincome:+2%vs.H12015:• DomesticRetail:highercommissionincomeon
paymentservices• WRR:highernetfeeandcommissionincomeinline
withstrategyofmorefee-generatingbusiness• Leasing:growthoftheloanportfoliocontributedto
higherincome• Otherincome(excl.fairvalueitems):-28%vs.H12015:
• WRR:otherincomereturnedtomorehistoriclevelsafteraverygoodH12015(e.g.positiverevaluationsintheprivateequityportfolioandsaleoflargepartofourstakeinABC)
• ResultfromourparticipationinAchmeawaslower
FVItems
6,2776,4616,089
Impactlowinterestrateenvironmentstilllimited
9
4.4534.643 4.522 4.596 4.482
4.6574.375
1,23%
1,29%1,36% 1,35%
1,32%1,33% 1,33%
1,23%1,36% 1,35% 1,35%
1,29%1,38%
1,29%
H12013 H22013 H12014 H22014 H12015 H22015 H12016
Netinterestincome(NII)andnetinterestmargin(NIM) Maindriverslowernetinterestincome
• DomesticRetail:netinterestincomewasdown1%causedbyalowerloanportfolio,andlowermarginsonpaymentaccountsvs.H12015
• WRR:netinterestincomedecreasedduetolowerresultsintheTreasuryarea,partlyasaresultofthecurrentrateenvironment
• Leasing:stablenetinterestincomeandmargin
• RealEstate:-14%duetoadeclineinFGHBank’sloanportfolio
NIM6m-rollingaverage
NIM12m-rollingaverage
Restructuringmeasuresarebearingfruit
10
2,407 2,379 2,264
1,400 1,5641,308
26219
190
150514
H12015 H22015 H12016
Operatingexpenses(in€mn)
3,833
4,312 4,276
Underlyingoperatingexpensesdevelopfavorable
• Staffcostsareonadownwardtrendduetorestructuringefforts;inH12016headcountwasreducedby~1,900FTEs
• Inaddition,employeebenefitswerecutback• Releaseofaprovisioncontributedtoadeclineinother
operatingcosts
IRDF
OtherOpex
Restructuring
Staffcosts
H12015 H22015 H12016
C/Iexcl.regulatorylevies 55 71 74
UnderlyingC/Iexcl.regulatorylevies 59 63 59
Cost/incomeratiodevelopment
3,807 3,9433,572
349273
253
117
48
37
44
47
43
H12015 H22015 H12016
Loanimpairmentcharges(LIC)(in€mnandinbpsofaveragelending)
Loanimpairmentchargesreach10-yearlow
11
7bps16bps 32bps
Allsegmentsbenefitfromeconomicrecovery
• Varioussectorsbenefitedfromtheeconomicgrowthandtheaccompanyinghigherconsumerspendingandexports
• DomesticresidentialmortgageloanscontinuetoperformwellwithLICat4bps
• VerylowLICindomesticbusinesslendingduetopositivedevelopmentofalltheindustriesthatRabobankfinances,exceptforgreenhousehorticultureandshipping
• DespitestructuralproblemsinsomepartsoftheDutchCREmarket,theoverallqualityoftheCREloanbookimprovedfurther.LICwerenegativeduetomorereleasesthanadditionstoallowancesforloanlosses
• LICatWRRmorethanhalved(23bps),mainlyduetolowerlossesintheNetherlands(Wholesale)
• Longterm(10-year)averageLICstoodat36bpsofaveragelending
148
677
356
DomesticRetail
WRR
RealEstate
Leasing
Other
Loan-to-depositratioimprovedslightly
12
287
212
282
212
279
219
101
115
99
124
104
123
29 30 3016 15 14
1,32
1,25 1,24
Lending Duetocustomers
Lending Duetocustomers
Lending Duetocustomers
H12015 H22015 H12016
LeasingRealEstate
Domesticretail
WRR
427426
328
434
338 343
LtDratioMaindriversimprovementinloan-to-depositratio
• Loanportfolioincreasedby€1bncomparedtoyear-end2015:• DomesticRetail:residentialmortgageloanportfolio
decreasedby€2bnduetoloansalesandextrarepayments,whereasloanstobusinesseswere€1bndown
• WRR:loanportfolioincreasedby€5bn.AmongstothersgrowthinRuralBankingandTrade&CommodityFinance
• Leasing:loanportfolioslightlyuponthebackofbettereconomicconditions
• RealEstate:loanportfoliodecreasedby€1bn
• Duetocustomersincreasedby€5bncomparedto2015:
• DomesticRetail:duetocustomersup€7bnpartlyasaresultofholidayallowancesreceivedinMayandanincreaseincurrentaccountsheldbybusinessclients.
• WRR:duetocustomersalmost€2bnlower.AtFYE2015RabobankhadalargeinflowofmoneyfromWholesale-customers.Partofthesedepositswerewithdrawnatthebeginningof2016.
Domesticretail
WRR
CommonEquityTier1-ratiowellaboveregulatoryrequirements
13
13,2% 13,5%13,1% 13,4%
>14.0%
0,2% 0,1%0.4%
30-06-15 31-12-15Phase-inCRDIV
01-01-16 RWAchange
Profit 30-06-16 Target2020
CommonEquityTier-1(CET1)Ratio(in%)
10.25%
12.5%
Maindevelopments• TransitionalCET1ratio30June2016:13.4%• FullyloadedCET1ratio30June2016:12.4%• CRDIVimpact1January2016:-0.4%-point• Pro-formaimpactsaleAthlon(tobefinalisedinH2
2016):+0.4%-point• InJuly2016theEBAconfirmedthatPillar2
requirementswillbesplitbetweenrequirements(P2R)andguidance(P2G)
Targets• Rabobanktargetsa14%minimumCET1ratio,which
offersaminimummanagementbufferof1.5%-pointoverandabovefullyphasedinminimumrequirementsof12.5%
• CurrentCET1ratioof13.4%impliesabufferof3.15%-point(€6.5bn)overminimumCET1requirements
• Asat30June2016distributableitemswere€25.4bn
SREP+SystemicRiskBufferphase-in
Rabobankwellontracktoreach>25%TotalCapitaltarget
14
Highlights
• RabobankisanoutperformerintermsofitsTotalCapitalRatio
• Rabobanktargetshighcapitalratiostoprotectseniorbondholdersagainstthe(unlikely)eventofabail-in
• RabobankiswellontrackinmeetingsitsTotalCapitaltargetandMRELrequirements
• IndicativeMRELrequirementsexpectedbytheendof2016
• Rabobankstronglysupportsthe‘FrenchProposal’forcreditorhierarchyinEurope
• InH12016,Rabobanksuccessfullyissued€1.25bnofPerpNC5AdditionalTier1
• InJuly2016RabobankissuedUS$1.5bnof10ybulletTier2securitiespro-formaadding0.6%-pointtotheTotalCapitalRatio
• Transitionalratiosasat30June2016:• Tier1ratio16.8%
• TotalCapitalratio23.5%• Leverageratio5.1%
13,5% 13,6% 13,5% 13,4%
>25.0%
3,1% 2,4% 2,9% 3,4%
3,2%5,3%
6,8% 6,7%
FY2013 FY2014 FY2015 H12016(inc.July2016T2issue)
Target2020
Capitalstructure(in%)
24.1%
23.5%
19.8%21.3%
23.2%
CET1
AT1
Tier2
JulyTier2issue(+0.6%-point)
Mediacallpresentation
Interimresults2016
WiebeDraijerandBasBrouwers18August2016